Audit fee scale (November 2022)
PSAA has published the 2022/23 audit fee scale, following consultation.
The fee scale applies for the audit work to be undertaken by appointed auditors in respect of the 2022/23 financial statements at relevant principal authorities that have opted into PSAA’s national auditor appointment arrangements for the period 2018/19 to 2022/23.
Auditors will undertake their work under the requirements of the Code of Audit Practice and supporting guidance published by the National Audit Office on behalf of the Comptroller and Auditor General, the financial reporting requirements set out in the Code of Practice on Local Authority Accounting published by CIPFA/LASAAC, and the professional standards applicable to auditors’ work.
Under the Local Audit (Appointing Person) Regulations 2015, the 2022/23 fee scale must be published by 30 November 2022 and cannot be amended after that date. Any subsequent changes in national requirements or local circumstances relating to the 2022/23 audits will therefore be the subject of fee variations.
Our consultation on the 2022/23 fee scale explained the impact on audit fees of the significant tensions and pressures in the wider audit market and profession, and of evolving arrangements in the local audit system. It also set out the practical difficulties for PSAA in setting a realistic fee scale without full information on all audit requirements or any information on audits for the preceding year.
On the basis of the broadly positive response to our consultation on the proposed 2022/23 fee scale, PSAA is setting the fee scale as set out in it. The fee scale therefore uses the fee scale set for 2021/22 audits as a baseline, with adjustments for:
- recurrent fee variations for 2019/20 and 2020/21 audits, for audited bodies where these have been submitted to PSAA and approved; and
- the 5.2% inflationary increase required under PSAA’s current audit contracts, although this will be funded from the surplus which would otherwise be distributed to opted-in bodies.
We are grateful for all the responses to our fee scale consultation, which have provided very helpful feedback on our proposals and the concerns of stakeholders. The PSAA Board has reflected on the consultation outcome and takes very seriously all the points made.
Many of the issues raised in response to the consultation are complex and typically extend beyond PSAA’s remit. PSAA has highlighted the need for urgent action to reform the local audit system in England, in response to the pressures and market fragility of recent years. We have publicly stated our view that radical changes are needed in the local audit system to achieve a more proportionate audit and a more sustainable audit system. We will continue in our determination to seek action on these issues with government and key stakeholders.